EB-5: A Roadmap to the Future

by Publius

Editor's Note - The author of this article wishes to remain anonymous. ILW knows the identity of the author and can attest that the author has deep experience in the EB5 industry.

Much has been made of the recent EB-5 regional center program (the “Program”) expiration. Many have undertaken to write an account of what has taken place. I thought it prudent to write what has actually taken place – to dispel misinformation and rumors. The goal here is a factual account. First, I discuss the history of how we arrived here. Second, where we currently are. Third, I discuss the path forward. 

The Program has been consistently renewed via short term reauthorizations since 2015. In June 2015, Senators Grassley and Leahy introduced legislation to renew and “reform” the Program. IIUSA supported that bill and the bills introduced thereafter. Its argument has been that “some” Program is better than no Program. However, others such as EB-5IC, RER, and REBNY have argued that a functioning Program that injects foreign capital and creates jobs at no cost to the U.S. taxpayers is paramount. This has created a sophistry – namely, that the industry must take sides: Program with reforms that do not ensure it is functioning optimally or no Program. The Program was renewed continually as it was coupled with other expiring immigration programs. However, the Program was decoupled as the result of negotiations between then Senate Majority Leader McConnell and then Senate Minority Leader Schumer in 2020. The goal was for the Program to be reformed and extended in the first six (6) months of 2021. However, this failed. It failed in large part because of the fear that Senator Grassley has wielded over certain groups: The Grassley way or no Program. Grassley attempted to push his bill via unanimous consent. Prior to that, Senate Majority Leader Schumer attempted to broker a deal accepting the Grassley/Leahy bill for a shorter period of time, which was rejected by Senator Grassley. A hold was put on the bill by Senator Rand Paul and Senator Lindsey Graham. Senator Paul withdrew his hold, but Graham did not. Thus, the Program expired.

Currently, the Program is expired. However, there is widespread support for the Program to be reauthorized. There have been ongoing negotiations with all the major stakeholders in the industry even as recently as last week. This is very positive. There is broad consensus on integrity reforms for the industry. There also appears to be a general framework for TEA definitions that are objective, investment amounts, and programmatic changes to make the program robust. It also seems clear that no immigration bill will pass (it appears that the Grassley/Leahy bill may have been DOA in the House even if it were passed by the Senate). 

The future of the Program is within reach. There are three possible vehicles for the Program to be renewed: bipartisan infrastructure through amendment, budget reconciliation, and the CR. But, it will require courage – the courage to admit that Grassley has set up a sophistry. The truth is that the reforms proposed in response to Grassley would be acceptable by all the industry. The challenge has been inconsistent messaging because of fear instilled by Grassley creating fissures in the industry. This cannot continue for the sake of all stakeholders. The industry should be united and act courageously telling the members of Congress that it agrees with the reforms proposed in response to the Grassley/Leahy bill. This is the path forward.


About The Author

Publius The author of this article wishes to remain anonymous. ILW knows the identity of the author and can attest that the author has deep experience in the EB5 industry.


The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.